The Marijuana Policy Project gives Donald Trump a C+ for his stance on pro-pot policies in the past, and that's a lower rating than Hillary Clinton, Gary Johnson, or Jill Stein received. Trump may not be nearly as friendly to pro-pot advocates as other candidates might have been, but does this mean you shouldn't buy marijuana stocks? Read on to find out what Trump's said about cannabis, and what marijuana stocks might be worth buying now that he's going to be our next president.


Changing times

Back in 1990, Trump said he was OK with legalizing drugs because the war on drugs was a "joke." However, Trump's moved decidedly away from that stance over the years. On the campaign trail, he's come out against legalizing and regulating recreational marijuana.

Despite Trump's apparent unwillingness to support recreational marijuana, he has taken a more supportive -- if not tepid -- tone when discussing marijuana as medicine.

During an interview with conservative pundit Bill O'Reilly, the host asked Trump what he would do about marijuana. Trump answered:

I would really want to think about that one, Bill. Because in some ways I think it's good and in other ways it's bad. I do want to see what the medical effects are. I have to see what the medical effects are, and, by the way -- medical marijuana, medical? I'm in favor of it a hundred percent. But what you are talking about, perhaps not. It's causing a lot of problems out there.

Later, Trump contested O'Reilly's position that medical marijuana is a "ruse," saying that "I know people that have serious problems and they did that, they really -- it really does help them."

His support for medical marijuana is further muddied by his belief that medical marijuana is a state issue, not a federal issue.


Marijuana stocks under President Trump

It seems there's a big difference in how Trump views recreational marijuana and medicinal marijuana. Trump's anti-recreational stance could mean marijuana is unlikely to get favorable DEA classification during his tenure. Further, it could mean that banking reform necessary for recreational marijuana businesses isn't on the table.

His position on medical marijuana,. however, may help companies that are working on marijuana-derived medicine. Of those companies, the two publicly traded companies that investors ought to consider are GW Pharmaceuticals (NASDAQ:GWPH) and Insys Therapeutics (NASDAQ:INSY).

GW Pharmaceuticals has had limited success in developing drugs based on the cannabinoid THC, but it has had considerable success developing drugs based on the cannabinoid CBD.

GW Pharmaceuticals markets the THC drug Sativex in Europe for multiple sclerosis spasticity, but trials of Sativex in cancer pain failed to outperform a placebo in 2015, and that's shelved future development of THC-based medicine in cancer.

Studies of the company's CBD drug -- Epidiolex -- in patients with rare and hard-to-treat forms of epilepsy have delivered more definitive wins. Epidiolex's trials has shown it reduces the number of monthly seizures in both Dravet syndrome and Lennox-Gastaut syndrome patients, and Epidiolex's efficacy and safety so far clears the way for GW Pharma to file for Epidiolex's FDA approval as soon as 2017.

Insys Therapeutics is also hard at work on the use of CBD in epilepsy. Insys already racks up nine-figure sales per year from its opioid spray Subsys, and earlier this year, the company began marketing its reformulation of the marijuana drug marinol as Syndros. Syndros is approved to treat uncontrolled nausea and vomiting in chemotherapy patients, and to restore appetite in HIV patients.

Insys Therapeutics' CBD research concentrates on its use in infantile spasms, but studies are also under way in Dravet syndrome and Lennox-Gastaut syndrome. Given GW Pharma's success, it wouldn't surprise me if Insys Therapeutics' CBD drug pans out, too.

Insys Therapeutics' existing drugs make it a profitable stock that's worth considering by marijuana investors. However, the company does have one big overhang that GW Pharma doesn't. The company is the subject of a slate of investigations involving the improper marketing of Subsys, and those investigations have caused the departure of Insys' senior management. Importantly, if the investigations continue, then Insys Therapeutics executives, former or current, could face criminal charges, and the company could get slapped with hefty fines.

Looking to the future

There's little reason to think the marijuana market isn't going to grow over the next four years. However, that growth could come in spite of Trump, not because of it.

Trump hasn't shown much support for recreational marijuana, but he has offered support for medical marijuana. Since Trump's plans include reforming the FDA so that drugs reach the market more quickly, Trump's win may not be bad news for GW Pharma or Insys Therapeutics. Both companies are conducting marijauna research that's intriguing, but it may be GW Pharma that's the better investment until Insys Therapeutics gets out from under scrutiny. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.